2978117
Description
Flashcards by Sarah Yuzaidi, updated more than 1 year ago
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Created by Sarah Yuzaidi
almost 9 years ago
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| Question | Answer |
| Optimal Sales Force Reward System | - Provide an acceptable ratio of costs and sales force output in volume, profit and other objectives - Encourages specific activities consistent with the firm's overall, marketing, and sales force objective and strategies - Attracts and retains competent salespeople, enhancing longterm customer relationships - Allow the kind of adjustments that facilitate administration of the reward system |
| Types of Sales Force Rewards | Intrinsic & Extrinsic Rewards (In between: Job Security) |
| Intrinsic Rewards | Sense of Accomplishment Personal Growth Development |
| Extrinsic Rewards | Pay Recognition Promotion |
| Financial Compensation | Straight Salary Straight Commission Performance Bonuses (Accelerators) |
| Straight Salary Advantages | 1. Easy to administer 2. Planned earning are easy to project 3. Allows easy control of sales force activities; thus, reassignments aren't troublesome 4. Useful when substantial development work is required |
| Straight Salary Disadvantages | 1. No incentive to improve performance 2. Represent a fixed overhead 3. Salary compression can be seen as inequity among experienced sales people |
| Straight Commission Advatanges | 1. Income is directly linked to desired results 2. Straight commission plans offer cost-control benefits |
| Straight Commission Disadvantages | 1. Straight commission plans contribute little company loyalty 2. Problems if commissions are not limited by an earnings cap |
| Straight Commission: Plan Variation | Commission Base Commission Rate Commission Splits Commission Payout Event |
| Commission Base | Volume or profitability |
| Commission Rate | Constant, progressive or both |
| Commission splits | Between two or more salespeople OR Between salespeople and employer |
| Commission Payout Events | When the order is confirmed, shipped, billed, paid, or a combination of these events |
| Performance Bonuses (Accelerators) Advantages | 1. Organisation can emphasise to what they see as important in the sales area 2. Useful for tying rewards to accomplishments of objectives |
| Performance Bonuses (Accelerators) | 1. If sales force don't fully support established objective, they won't exert any additional effort to accomplish it 2. Difficult to determine a formula for calculation bonuses objectively is they are in subjective terms |
| Non-financial Compensation | Sense of Accomplishment Opportunity for Personal Growth Job Security Opportunity for Promotion Recognition |
| Sense of Accomplishment | - The internal sense of satisfaction from successful performance - Sales managers should facilitate salespeople ability to feel it |
| Opportunity for Personal Growth | Access to programs that allow personal growth E.g. Tuition reimbursement, leadership development seminars |
| Job Security | A sense of being a desired employee that comes from consistent exceptional performance |
| Opportunity for Promotion | The ability to move up in an organisation along one or more career paths |
| Recognition | The informal or formal acknowledgement of a desired accomplishment |
| The Sales Manager | Ultimately responsible for the organisation's achieved sales and profit objective of the firm |
| 3 Main Roles of Sales Manager | 1. People Management 2. Customer Management 3. Business Management There needs to be a balance force, as there are often conflict between them |
| Sales Roles of Manager Percentage Distribution | Salespeople 30% - 55% Customers 25% - 40% Company 20% - 35% |
| Typical Roles of Sales Manager: As a People Manager | 1. Recruitment - Selecting the team 2. Coaching - Building the team 3. Inspire - Leading the team 4. Manage the team 5. Motivate/Reward the team |
| Typical Roles of Sales Manager: As a Customer Manager | 1. Facilitate complex sales 2. Manage key relationships 3. Develop account plans 4. Guide opportunities 5. Assist with sales process |
| Typical Roles of Sales Manager: As a Business Manager (From company to field) | 1. Manage resources 2. Engage other company functions 3. Adapt strategy to local needs 4. Facilitate company culture and policies 5. Perform administration and logistics |
| Typical Roles as Sales Manager: As a Business Manager (From field to company) | 1. Share market share insights (for market planning and product development) 2. Report of field performance & activity 3. Perform administration & logistics |
| Importance of Planning | - More effective - Minimise environmental shock - Avoid hasty decision-making - Sense of direction and kept focused - Improves morale to everyone involved - Improves collaborates cooperation - Sets standards |
| Levels of Planning | Management<----------------------->Sales Force 1. Strategic planning 2. Tactical planning 3. Monthly & Weekly planning 4. Daily planning |
| Strategic Planning | - Long term direction of the firm - Using resources to achieve goals |
| Tactical Planning | Short term activities to achieve strategic plans |
| Monthly & Weekly Planning | Sales call cycles, budgets, developing prospects |
| Daily planning | Sales calls, budgets, prospects |
| Sales Force Manager should consider... | Diagnoses Prognosis Objectives Strategies Tactics Control |
| Planning Process | |
| Analysing the Situation | Market characteristics Competition Sales, profits, costs Benefits offered Promotional mix Distribution systems |
| Setting Goals & Objectives | Goals - General Objectives - More specific (Expense budgets, number of new accounts, conversion rates) |
| Determine Market Potential & Sales Forecast | Market potential - max. sales of industry Sales potential - max. sales of company Sales forecast - define by unit measure (company, region, salesperson - what's realistic?) |
| What support sales forecast (sales budgets)? | Resources (defined by unit of measure) - Time - Money - Materials - Equipment - People |
| Evaluate & Control | ESSENTIAL PART OF THE PLANNING PROCESS - Sets transparent standards - Sets benchmarks to assess performance E.g. sales volume, selling costs, market share, customer service, customer satisfaction) |
| Territory Analysis | Who are the prospecting buyers? Where are they located? What and why do they buy? Who has buying authority and what are the influences to decision? What's the probability of selling this account? What's the potential share of account? |
| Sales Organisation Structures | Geographic, Product, Function, Customer/Market |
| Equalised Sales Force | Based on time and effort to service accounts Variables: size of account, time required per account, geographic location, account potential |
| Incremental Productivity | Based on economic marginal analysis Marginal revenue = Marginal costs Variables: sales volume, COGS, gross profits |
| Advantages of Company Representative | Selling only company products Greater attachment with company Greater control over activities |
| Advantages of Independent Manufacturer Representatives | Easier penetration to new markets Predictable sales expenses Greater territory coverage Improved Cash Flow |
| Independent or Company Salespeople Costs? | |
| Basic Category of Rewards | Compensation & Non-Compensation Rewards |
| Compensation Rewards | Those given in return for acceptable performance or effort - Can include non-financial compensations |
| Non-compensation Rewards | Beneficial factors given to salespeople for work situation or well-being |
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